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Paolo Gabriele (bottom), the pope's butler, travels withPope Benedict XVI on April 18, 2012. Gabriele was arrested after secret documents were found in his apartment. (Image source: AFP)

VATICAN CITY (AP) — The Vatican confirmed on Saturday that the pope’s butler has been arrested in its embarrassing leaks scandal, adding a Hollywood twist to a sordid tale of power struggles, intrigue and corruption in the highest levels of Catholic Church governance.

Paolo Gabriele, a layman and member of the papal household, was arrested Wednesday after secret documents were found in his Vatican City apartment and was continuing to be held Saturday, Vatican spokesman the Rev. Federico Lombardi said in a statement.

Gabriele is often seen by Pope Benedict XVI’s side in public, riding in the front seat of his open-air jeep during Wednesday general audiences or shielding the pontiff from the rain. He has been the pope’s personal butler since 2006, one of the few members of the small papal household that also includes the pontiff’s private secretaries and four consecrated women who care for the papal apartment.

His arrest followed another stunning development at the Vatican this week, the ouster of the president of the Vatican bank, Ettore Gotti Tedeschi, by his board. Sources close to the investigation said he, too, was found to have leaked documents, though the official reason for his ouster was that he simply failed to do his job.

The “Vatileaks” scandal has seriously embarrassed the Vatican at a time during which it is trying to show the world financial community that it has turned a page and shed its reputation as a scandal plagued tax haven.

Vatican documents leaked to the press in recent months have undermined that effort, alleging corruption in Vatican finance as well as internal bickering over the Holy See’s efforts to show more transparency in its financial operations. But perhaps most critically, the leaks have seemed aimed at one main goal: to discredit Pope Benedict XVI’s No. 2, Cardinal Tarcisio Bertone, the Vatican secretary of state.

The scandal took on even greater weight last week with the publication of “His Holiness,” a book which reproduced confidential letters and memos to and from Benedict and his personal secretary. The Vatican called the book “criminal” and vowed to take legal action against the author, publisher, and whoever leaked the documents.

The Vatican had already warned of legal action against the author, Italian journalist Gianluigi Nuzzi, after he broadcast letters in January from the former No. 2 Vatican administrator to the pope in which he begged not to be transferred for having exposed alleged corruption that cost the Holy See millions of euros in higher contract prices. The prelate, Monsignor Carlo Maria Vigano, is now the Vatican’s U.S. ambassador.

Nuzzi, author of “Vatican SpA,” a 2009 volume laying out shady dealings of the Vatican bank based on leaked documents, said he was approached by sources inside the Vatican with the trove of new documents, most of them of fairly recent vintage and many of them painting Bertone in a negative light.

Bertone, 77, had no diplomatic experience when, after Benedict’s election, he took over the high-profile job as the main administrator of the Vatican and its external relations. He had long been Benedict’s loyal deputy as a canon lawyer at the Vatican’s orthodoxy office.

But he has been blamed for a series of gaffes that have plagued Benedict’s papacy and, according to the leaked documents, generated a not inconsiderable amount of ill will directed at him from other Vatican officials.

“For some time and in various parts of the church, criticism even by the faithful has been growing about the lack of coordination and confusion that reign at its center,” Cardinal Paolo Sardi, the former No. 2 official in the Vatican secretariat of state, wrote to the pope in 2009, according to the letter reproduced in “His Holiness.”

At a news conference this week, Nuzzi defended the publication of the book and said he wasn’t afraid of Vatican retaliation. In fact, he even taunted Vatican prosecutors to seek help from Italian magistrates to investigate the case, charging that it would be a remarkable turnaround, given that the Vatican has been less than helpful in the past when Italian prosecutors came asking for information for their investigations.

He praised his sources – and said there were several – in his acknowledgments, writing: “They risked their jobs, loves, lives to entrust their big and little secrets.”

Nuzzi had no comment Saturday about the arrest.

Lombardi said Saturday the arrest of Gabriele was a sad development for all Vatican staff. “Everyone knows him in the Vatican, and there’s certainly surprise and pain, and great affection for his beloved family,” Lombardi said.

Lombardi said Gabriele had met with his two lawyers and that the Vatican judicial system was taking its investigative course. He hasn’t been indicted.

The Vatican has taken the leaks very seriously, with Benedict appointing a commission of cardinals to investigate. Vatican gendarmes as well as prosecutors are also investigating the sources of the leaks.